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Microsoft set the price of its new Surface tablet below comparable versions of Apple's iPad. The company will sell a 32GB Wi-Fi version of its tablet at $499, versus $599 for a comparable version of Apple's new iPad.

Microsoft's tablet, will go on sale on October 26 as the company launches the new Windows 8 operating system.

Two models of Surface will be available: one running an ARM processor featuring Windows RT, and one with a third-generation Intel Core processor featuring Windows 8 Pro.

The Windows RT version of the tablet - set for release on Oct 26 - will be based on Nvidia Tegra 3 chip designed by ARM Holdings. It will feature new app-style versions of Office such as Word, PowerPoint and Excel, and will include Xbox games, video and music apps.

Surface for Windows RT is comparable to Apple's new iPad, heavier but slightly thinner. It has a 10.6 inch screen and comes in 32GB and 64GB memory sizes. The tablet is also equipped with two cameras and a USB port and it will be Wi-Fi only.

Microsoft will also offer a 32GB model bundled with a black 'Touch Cover' - that doubles as a keyboard - for $599, and a 64GB version with a black Touch Cover for $699.

That compares to $699 for a 64GB Wi-Fi only version of the new iPad.

The Surface will be available in stores in the United States and Canada and online from October 26 for consumers in Australia, Canada, China, France, Germany, Hong Kong, Britain and the United States.

A variety of accessories will also be available, including Touch Covers in five colors - black, white, magenta, cyan and red -priced at $119.99. Microsoft's customers will also have the option to purchase a Type Cover in black for US$129.99, which adds moving keys for a more traditional typing feel.

The Windows 8 Pro version of the Surface tablet will be relaeased later in a few months.